March 8 (Bloomberg) -- Barclays Plc, the U.K.’s second-largest bank by value, said it will consider tendering its audit
contract held for 117 years by PricewaterhouseCoopers LLP.

Barclays is considering “how and when a tender process
might be implemented, particularly given the transitional
provisions suggested by the Financial Reporting Council,” it
said in its annual report today. “A recommended course of
action will be proposed to the board during 2013.”

The decision shows a softening of the bank’s stance from
July 2012 when the bank said in a letter to the U.K.’s Financial
Reporting Council that a change of auditor would be “highly
disruptive and costly.” HSBC Holdings Plc said earlier this
week it will tender its audit contract with KPMG LLP.

PwC, the world’s largest accounting firm, which has held
the contract since 1896, was paid 44 million pounds ($66
million) by Barclays for services including audit and tax
consulting last year. It received 54 million pounds in 2011.

Auditors were criticized for not spotting practices that
led to the banking crisis that began in 2007. The Economic
Affairs Committee of parliament’s upper house in a 2011 report
said there were “grave defects in the auditing of banks.”

Flint, Cheung

HSBC, Europe’s largest bank by assets, said it would accept
bids for its external audit contract, held by KPMG since 1991.
KPMG, the world’s fourth-largest accounting firm by revenue, won
the business without a bidding process, the bank said in its
annual report this week, and there hasn’t been one since. The
winner will be appointed in 2015, it said.

The bank paid KPMG $80.5 million in 2012 for services
including audit, tax compliance, computer security and help
valuing assets. Chairman Douglas Flint and Marvin Cheung, a non-executive director who is a member of the audit committee, have
both worked for KPMG, according to the annual report.

Finance Director Chris Lucas joined Barclays in 2007 from
PwC. He said last month he will retire as soon as a successor is
found.

Barclays said it recommended PwC should be re-appointed as
its auditor at its annual meeting due to be held on April 25 in
London for the coming year.